FROM THE PRESIDENT
FROM THE PRESIDENT
BRANDON RICH | GREYSTAR REAL ESTATE PARTNERS
Defending Our Industry from Rent Control
In the coming weeks, months and years, our industry will increasingly be the target of a growing momentum to enact rent control as a means to soften rent increases and ensure more affordable housing for Colorado ' s growing population.
The government affairs team of staff and volunteers at AAMD and CAA is continually working against this, knowing that while appealing to the average renter, a policy like rent control will have the opposite effect of driving down rents, and poses far more dangers than people realize. In fact, 93 % of economists agree that rent control doesn’ t work, and Forbes called it one of the 10 worst ideas of the 21st century!
As members of AAMD, it ' s important for us to be educated about issues such as rent control, so you understand why we advocate the way we do. AAMD is creating a video that will be posted and advertised on social media through our new public education campaign website launching in March. In the meantime, here are five reasons that rent control regulations are bad for renters and landlords alike and are not an effective answer to unaffordable housing.
Rent control hurts the very low-income renters that it is intended to help.
Unfortunately, rent control really is too good to be true. Obviously, rent control regulations will help the people lucky enough to live in a rent stabilized housing development. It is ultimately most effective as a political tool that sounds like it will help low-income renters, but actually ends up helping the middle and upper classes as their income continues to increase but their rent doesn’ t. Why would they ever move out of a rent-controlled apartment when they’ re getting such a sweet deal?
93 % of economists agree that rent control doesn ' t work, and Forbes called it one of the ten worst ideas of the 21st century!
Rent control results in increased growth in the overall median rent across the city.
Rent control regulations inevitably and ironically have the opposite effect on the rest of the rental housing market and actually increase rental costs. Enacting rent control policies have time and again proven to increase the overall median citywide rental prices.
Rent control actually results in increased rental costs for the majority of the housing market.
When rent control regulations are put into place, it will only artificially lower the rent for a small percentage of housing units. However, by regulating the market and artificially lowering rental prices in one part of the housing market, the rental prices for the remainder of units in the market will inevitably increase. Therefore, rent control ultimately makes housing even more unaffordable for everyone who isn’ t fortunate enough to live in a housing development where the rent is controlled.
Rent control attacks the symptoms of the lack of affordable housing rather than the actual source.
Rent control simply addresses the most noticeably symptom of housing strain – high rental prices. However, regulating the market by superficially lowering rents on apartments with a much higher market value does nothing to address the actual problem of the need to provide more affordable units.
Actually, rent control inevitably decreases the amount of affordable rental properties, while increasing the amount of renters in the market. In reality, rent control addresses the high prices but limits the amount of affordable housing even further.
Rent control further restricts the supply of rental units.
First of all, in a housing market regulated by rent control, fewer housing developments will be constructed. Builders will construct commercial buildings instead of housing development to turn a profit. The ultimate effect is that new affordable housing doesn’ t get built, while the existing housing falls into disrepair.
Defending apartments from rent control was one of the central founding principles of AAMD 50 years ago and continues to be a battle we have to wage, but education is the key. Please help our cause and yours by telling your friends and colleagues about why rent control is such a bad idea.
Visit www. aamdhq. org to learn more about AAMD ' s advocacy efforts, and stay tuned for the new public education website being launched next month.
6 | TRENDS • FEBRUARY 2018 www. aamdhq. org